Third of investors betting on UK for equity returns in 2016

One in three investors are betting on the UK delivering the higher equity returns this year.

Last year was a challenging year for investors who had to face emerging market and commodity slumps, and many buy-and-hold investors ended up roughly where they started despite a rollercoaster ride.

However, those who timed the market well and made active sector and stock decisions may well have ended up in significant profit.

Continuing with active decisions in both geographic areas and sector could also help bruised investors boost their profits in 2016.

Online stockbroker Interactive Investor polled 11,000 private investors on which geographic region they though would deliver the highest equity returns in 2016. More than one in three, 35.8%, said UK equities would deliver the best returns, followed by the US (20.6%) and Europe (19.7%).

This was then followed by Japan (12.2%), China (4%), Other Asia (3.6%), Other developing (2.8%) and Latin America (1.3%).

Rebecca O’Keefe, head of investment at Interactive Investors, said: ‘More than 35% selected the UK as the region they believe will deliver highest returns this year, with three quarters selecting established Western markets in preference to Japan or developing nations.

‘In terms of major indices, the UK underperformed throughout 2015, but this poor performance is more reflective of global rather than UK conditions. The commodity-heavy FTSE 100 index may have underperformed but smaller companies, which have far higher exposure to the British economy, actually did well throughout the year.’

O’Keefe added that investors were also ‘actively looking at the prospect of a turnaround in raw material and oil prices, which could help the FTSE 100 index to outperform in 2016’.

She added: ‘With the banking sector also have underperformed in a landscape where smaller profits are becoming the norm, a return to private ownership for the big banks could also lend support to the main UK index.’